Payments of $1,800 in 1 year and another $2,700 in 6 years to settle a loan are to be rescheduled with a payment of $1,000 in 18 months and the balance in 36 months. Calculate the payment required in 36 months for the rescheduled option to settle the loan if money earns 3.85% compounded semi-annually during the above periods.

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A: In this we have to calculate the present values of both options and equate them with payment.

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Q: Payments of $1,600 in 1 year and another $2,300 in 4 years to settle a loan are to be rescheduled…

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A: Loan amount = $ 89,000 Interest Rate = 8.3% Monthly Interest Rate = 8.3% /12 = 0.692% Number of…